Talent Tube: how Britain's new YouTube superstars built a global fanbase

This article was taken from the Februayr 2013
issue of Wired magazine. Be the first to read Wired's articles in
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They are Britain's new screen superstars -- a generation that
has built a global fanbase (and a chunky living) on their YouTube
channels. So why would they need old-style TV
stations?

Jamal Edwards

144 million channel views

Finlay Mackay

Late on a Thursday night in October 2012, Jamal Edwards is sitting cross-legged on the floor of Ed Sheeran's south London flat,
about to interview him. Sheeran is tired: the singer-songwriter,
whose debut album, +, has gone quadruple platinum in the UK, is
exhausted after a flight back from a US tour and an evening filming
The Jonathan Ross Show. But Sheeran feels he owes a lot to
Edwards, so he's making time as the 22-year-old clears some space
on the memory card of his SLR camera, time which he spends teasing
Edwards: "Jamal's too big now; he just gets other people to
film."

As YouTube has grown -- 800 million people now visit the streaming
site each month and 72 hours of video a minute are uploaded -- a
new generation of British media talent has grown up with it.
When YouTube started, they were kids. Now they're taking on the
entertainment industry.

Edwards uploaded his first clip to YouTube seven years ago, as a
teenager living on an estate in South Acton. He had already been
expelled from two schools: "I was very destructive," he says during
the drive back to his Docklands home after interviewing Sheeran. "I
have a very short attention span. But loved media -- I started
MCing and rapping at school." Edwards's MC moniker was Smokey Bars.
In 2005, his mother, Brenda, who had made it to the last four of
The X Factor that year, bought her son a Panasonic video
camera. He used it to film foxes on his estate, put it up on
YouTube under the username Smokeybarz and received a few thousand
views. Edwards kept up the urban nature documentaries, but
also started covering the local underground music scene,
interviewing grime artists and asking them to play sessions for
camera. "I just wanted to broadcast it," he says. "I set it up
because my friends weren't getting mainstream success, and YouTube
was an easy platform to share videos with them." Edwards hacked his
school's internet server to show what he was calling Smokey Bars
Television (SB.TV).

A generation has grown up with YouTube. When it started,
they were kids. Now they're taking on the entertainment
industry

He left school with six GCSEs and started work at Topman, while
applying for jobs as a runner at the BBC. His promises that he
would make the tea and do any odd jobs to get a foot in the door
went unanswered, but in the meantime SB.TV grew with the UK urban
scene. Edwards interviewed Dizzee Rascal, Chipmunk and Mike
Skinner, and on July 8, 2009, after applying several times,
was accepted as a YouTube partner. This meant the site would
equally split the revenues from adverts served against his videos,
and he was sent his first cheque. "It was £100," he says. "But I
was excited, like, 'Oh my God, I'm earning money off making
videos.'" He helped break artists such as Tinchy Stryder and
Wretch 32 into the mainstream, followed by acoustic acts
including Ed Sheeran in February 2010. "It was the main thing that
helped me take off," Sheeran says. "We met through Twitter and he
came down and filmed me. At the time, it was a big risk for
him - he was only doing grime."

Edwards was expanding his vision. In November 2009 he emailed
Daren Dixon, CEO of AAB Talent Management: "What I'm trying to do
is cross over on to the mainstream market as I dominate the UK
urban scene at the moment… I've got an online YouTube channel
called SB.TV which is quite popular here in London. I am an
official YouTube partner, which is rare in London."

Edwards shared some stats to state his case: 11 million total
views from 15 countries, 14,000 subscribers and 30,000 views a day
-- "I had to show I was on my grind everywhere," Edwards says. The
two swapped late-night IM and BBM chats, and in May 2010,
Dixon booked Kelly Rowland for an interview with SB.TV. After that,
mainstream stars such as Bruno Mars and Justin Bieber followed.
Edwards wasn't going to be making tea any more. He ramped up his
ambition and his operation, hiring a managing director, then
nine other people. He's since discussed business ventures with
Richard Branson and interviewed David Cameron; Ed Miliband follows
him on Twitter. SB.TV has had 130 million views on YouTube and
215,000 people subscribe to the channel. In 2012, The
Sunday Times ranked Edwards on its annual Young Rich List at
£6 million; SB.TV's revenues in 2011 were £110,000, and revenue
from YouTube alone was worth £200,000 from January 2012 to October
2012. The company has also struck merchandise and brand deals with
high-profile clients including Adidas, Nike and Sony.

Alongside his grime and acoustic channels, he's added comedy,
sports, fashion, business, culture and a US channel. He's also
looking at live events, including an SB.TV national tour and
package holidays to Mallorca, Ibiza and Croatia. None of it would
have been possible without YouTube, Edwards believes. "From where
I've come from to where I am now… YouTube is so important. It's
easily accessible and it can get you watched by millions." He once
met Chad Hurley, a
founder of YouTube, at an event in London. "He's the man. My mates
were like, 'You're such a geek -- why are you getting excited?' and
I said, 'Bro, show him some respect!' So we took him to
Nando's."

Edwards is building a new type of television network. "It's
not Smokey Bars TV any more: it's Self Belief, it's Stay Building.
I'm going to revolutionise it."

Charlie McDonnell

265 million channel views

Finlay Mackay

He's not the only one. Charlie McDonnell created
the channel charlieissocoollike in 2007 aged 16, while
revising for his GCSEs, and began uploading video blogs. Now his
channel has 1.6 million subscribers and he earns more than his
parents.

He moved from his native Bath to buy a house in south-west
London outright, which he currently shares with another
YouTube success story, 23-year-old musician Alex Day. Day is
not signed to a record label, but last year he went to number four
in the UK singles chart with "Forever Yours", a self-released
single he promoted on YouTube; he's generated more than
500,000 paid downloads of his music thanks to the platform.

Three years ago, Tanya Burr was working on makeup counters in
Bramerton, near Norwich. She started posting make-up tutorials and
was signed by a YouTube talent agency: "It's a full-time
career for me now," says the 22-year-old. Sketch-writer and
cartoonist Tom Ridgewell first started making web videos when he
was 11 -- before YouTube even existed -- but can now boast 55
million views, 220,000 subscribers and an income of anything
between £3,500 to £7,000 a month. In a similar vein, Luke Hood
began what was essentially "a pirate radio-station based online",
uploading dubstep music videos that he liked. The 20-year-old now
heads up a team of 25 people, and his channel UKF has had one
billion views and has sold 250,000 albums in the UKF Bass Culture
series. These guys aren't waiting on a BBC show or a
reality series on Channel 4.
For them, YouTube isn't a springboard into television and fame:
YouTube is television.

Google, which owns YouTube, says that more than 1,000 people
worldwide are earning at least $100,000 (£63,000) per year just
from YouTube advertising revenues and a million YouTube users are
earning money from their videos - a greater number than are
employed in the US television industry.

Eight years ago, YouTube didn't exist.

Google bought YouTube for $1.65 billion (£1 billion) in December
2006, when the video-sharing site was less than two years old. It
had 67 employees and had yet to turn a profit. The purchase became
known as "Google's folly", and not long after the sale, wired US
wrote: "You'd be forgiven for wondering how clearly Google thought
this thing through."

The lack of a business model, though, was quite deliberate. In
February 2005, PayPal alumni Chad Hurley, Steven Chen and
Jawed Karim created a simplified platform for uploading and sharing
videos. They called it YouTube and it bore the motto: "Broadcast
Yourself". Unlike some of its rivals, it didn't charge anything or
offer any financial reward for content creation. "We had a lot of
competitors whose hook or selling point was that they could
generate revenue for content creators," Hurley says. "We didn't
want to create a barrier for people to participate in, and view
this content."

By not pegging YouTube to a particular business model, though,
its founders revealed "new patterns of attention among audiences,
that came out of audience behaviour rather than a business policy",
according to Matt Locke, a former commissioning editor at Channel 4
and founder of Storythings, a consultancy firm. "YouTube got there
because it was a platform, not a channel. The difference is that if
you're a platform, you're not making any assumptions about how
people are going to use it. Because TV had such a dominant monopoly
on attention in the living room, it had been hard for people
to think that audiences might want to consume content in a
different way." They did, though: users started to discover videos
not from a channel schedule, but by social recommendations and
organic search. Today, YouTube is the second-largest search
engine
on the planet, after Google itself.

"Selling to Google was one of the best decisions we ever made,"
Hurley says. (Fox Interactive was
also in the running: "I don't even want to think about that," he
says.) Google did two things that turned it into a business, and
eventually its own industry. First, it globalised the platform.
This meant that niche topics, ones that could never justify a
channel in a single domestic market, had a global reach. Young
creators such as Edwards, Hood and Burr started building
audiences around particular niches, whether dubstep or makeup. They
interacted with these audiences and responded to comments and video
suggestions. This meant real-time audience feedback -- a form of
A/B testing. "If it doesn't work out, you try something else," says
Day.

"The ability to interact with their audience is a critical part
of their success," says Sara Mormino, director of YouTube content
operations in Europe, the Middle East and Africa (EMEA). "It's a
two-way dialogue that was not possible with traditional
media."

Soon, the audience turned into users. And those users easily
turned into creators. "When you watch all these people who are very
much like you, there's nothing stopping you from creating the way
they do. There's no harsh line between creator and consumer," says
Hank Green, the founder of online video conference VidCon. "There's
a really powerful social network around YouTube content creators,"
says Tim O'Reilly, the founder of O'Reilly Media. "Many of the
channels are really helping each other to get off the ground." For
creators, it's simpler: "All my closest friends are You Tubers,"
Charlie McDonnell says, and as Ridgewell puts it: "Pretty much
every British YouTuber knows each other. We all mash
and interact. YouTube is not something you do on your
own."

[Quote##The average annual net payout to the top 1,000 [video]
producers is now $276,000 (£174,000)##OpenSlate]

Most of all, the emerging stars of this new platform were
authentic. None of them started out to make careers, they just
wanted to share their videos. "When me and Charlie started, we
weren't doing it for the money," Day says. "Everything we've got
has been a side effect." McDonnell agrees: "It's one person in
front of a camera, making a really honest connection." That
connection helped make Justin Bieber an early YouTube
celebrity. He presented himself as he was to camera, and millions
of people "beliebed". When Eric Schmidt, then CEO of Google, now
executive chairman, gave the MacTaggart lecture (an annual
keynote address for the TV industry) in August 2011, he summed it
up succinctly: "The internet… makes TV more personal, more
participative, more pertinent. People are clamouring for it."

But YouTube was not making its creators -- or Google -- any
money: in 2008, its revenues were $200 million (£126 million), but
it spent $700 million (£430 million). Advertisers were unconvinced
by a platform whose biggest hits included "Baby Monkey (Going
Backwards On A Pig)", and users didn't like clicking on ads. Still,
Eric Schmidt told Wired in 2009 that YouTube was attracting "an
enormous, extremely large set of people who are spending an awful
lot of time there. We will eventually figure out a very successful
business."

Schmidt may already have had some idea of what that business
would be. At a Super Bowl party in 2008, Microsoft employee Shishir
Mehrotra had been struck by how his guests kept asking him to
replay the Super Bowl adverts. Mehrotra wondered whether the idea
could be applied online: could you show only the adverts that a
user wanted to watch? His solution was video adverts that users
could skip. Advertisers would pay only when a user chose to watch
their advert, and therefore would get engaged, interested
users.

Mehortra took his idea to Google and on 1 December 2010, TrueView
rolled out. "It is one of the most important innovations," says
Matthew Glotzbach, product management director for YouTube
EMEA. "It's like taking a scalpel rather than a machete." Now, 65
per cent of YouTube adverts are skippable and, according to Enders
Analysis, the cost per thousand views is often more than $15 (£9)
-- two to three times the standard rate for non-skippable adverts.
Robert Kyncl, YouTube's global head of content, says that
YouTube adverts now make more revenue per hour than US cable
television. Enders Analysis says that, as a result, Google has
now "more than made its money back from YouTube".

Tanya Burr

54 million channel views

Finlay Mackay

That lucre has washed through the system: OpenSlate, an online
video consultancy, says that the average annual net payout to the
top 1,000 producers is now $276,000 (£174,000). Mormino says that
splitting ad revenues with content creators "is the base to
generate revenue. The partner programme is a way to transform this
creativity into something that is a professional career for
people." YouTubers started making enough money from the platform to
support themselves, and now a whole new video ecosystem of
producers, agents and networks is emerging. VidCon, which started
in 2010 with an audience of 1,000, hosted 7,000 people last year.
"It felt like being at a Beatles concert in 1964," says O'Reilly,
who attended the online video event. "Thousands of girls screaming
for these YouTube stars as they walked out on to the stage."

Justin Gayner had worked in British television on programmes
such as QI. In November 2008, he set up ChannelFlip, a
network of YouTube channels. "I was privy to the audience
figures for TV," he says. "I saw a big tide of activity on YouTube
versus a dwindling amount on TV, and I thought, 'There's got to be
a business in this.'"

Gayner's company now aggregates 136 channels across YouTube,
working with native talent and also signing up content producers in
traditional media. As of October 2012, there had been 1.4 billion
views across ChannelFlip's YouTube properties, through 8.4 million
subscribers. Gayner says his revenues have grown two to three times
every year. "It's early days," he says. "But we're dealing with the
largest audio-visual channel in history." In November, Base79, a UK
company that now runs the largest YouTube network in EMEA,
announced a funding round of $10 million, valuing the business at
more than $30 million (£19 million). Dominic Smales runs Gleam
Digital, a talent agency for social-media stars (Tanya Burr is on
his books). "I still see this as seed planting - no one's getting
minted," he says. "TV agents would laugh, but in two years' time
it's going to be a different landscape. YouTube talent will be way
more influential."

On the sixth floor of an orange high-rise designed by Renzo
Piano in London's Bloomsbury, 30 or so young YouTubers (the oldest
is 23) are hanging out. On the main set, dressed to look like a
library from a period drama, another YouTube talent is acting
out skits in homage to Tom Ridgewell, who is
here to receive an award from YouTube for the millionth subscriber
to his TomSka channel. "We all partake in a video-making
experiment," says Ridgewell. "I'm here because I made a million
people go..." he mimes clicking a mouse.

The jokes in the skits are sixth-form, because that's when most
YouTubers started filming. But this video-production hub (which is
free to any YouTuber who books in) is YouTube's attempt to grow its
user-generated content into something more like professional
television. The Creator's Space, which opened in May 2011, is the
first of its kind in the world: there are editing suites, a stage
with professional camera rigs and lighting, voice-over booths,
editing suites and even a green room for special effects. "We're
creating a whole new ecosystem of professional skills," Mormino
says. She heads YouTube's Next Lab,
which aims to unearth and develop new talent for the platform. "Our
objective is to allow young people to refine their skills, help
other YouTubers learn from each other, and enhance their
creativity."

YouTubers started making enough money from the platform
to support themselves, and now a whole new video ecosystem is
emerging

After being happy to let behaviours emerge on its platform,
YouTube is now making efforts to steer them, as it moves from
hosting amateur to more professional video. The Creator's Space is
one part of that; its Original Channels are another. In November
2011, Google announced it was investing $100 million (£63 million)
in 100 new channels, and it would give the money to creators -- who
include Jay-Z and Madonna -- as an advance. A month later, Google
unveiled a redesigned version of YouTube, which put channels front
and centre, and in October 2012 the company announced it was
expanding the initiative to Europe, with another 60 channels. Many
of those were pitched by native YouTube networks; ChannelFlip and
Gleam Digital have both launched channels. But YouTube has also
wooed traditional TV producers, with channels including ITN
Productions and BBC Worldwide.

"We're looking at it as an aggregated and
editorialised platform where we can build up an audience,"
says Dan Heaf, managing director of digital at BBC Worldwide.
"There's no doubt that YouTube is moving towards being a variation
on the channel model." He says that digital revenue accounts for
ten per cent of BBC Worldwide's turnover and adds, "I'm expecting
this to grow quickly with initiatives like this." He also thinks it
will allow the monetisation of BBC content beyond just selling ads
-- whether through a subscription model or pay-per-view.

The battle of TV versus YouTube may prove to be only an
incidental skirmish in a much more important war for the living
room

Ben McOwen Wilson is director of content partnerships at YouTube
and led the recent European expansion, listening to about 500
pitches for Original Channels. "We see this as the third wave
of TV," he says. "We're going to see tens of thousands of
channels that are able to find their audience and build content
specifically for that audience." The success of a YouTube video
used to be measured by the number of views. At the time of writing,
the latest sensation was PSY's " Gangnam Style", with more than 600 million views. But YouTube
doesn't want to reward ironic K-pop: it recently tweaked its
video-ranking algorithms to promote clips that keep viewers
watching and engaged. According to the YouTube Creators blog post
that announced the change, "this should benefit your channel if
your videos drive more viewing time across YouTube." So if a
You-Tuber makes a video that leads to a person clicking on another
video and spending more time on the site, that video will rank
higher. Conversely, the new algorithms punish videos that
prompt cheap, quick clicks, but which don't keep a user
interested.

In late 2012, YouTube rolled out its Project Hitchhiker
redesign, aimed at making video and channel discovery easier. This
redesign and the new emphasis on channels, are all part of
Google's strategy to get people to spend more time on
YouTube. According to a comScore report for May 2012,
people in the US spend five hours watching television each day;
they spend five hours watching YouTube each month. The way to be as
successful as TV, YouTube reasoned, was to be more like TV. And
with the Original Channels, YouTube isn't parking its tanks on the
lawn of traditional TV, so much as inviting traditional TV to build
its tanks for them. In her MacTaggart lecture in 2012, Elisabeth
Murdoch warned broadcasters: "Believe at your own risk that
[YouTube's] platform is based on homemade videos of cats in washing
machines or a dog called Fenton… Commercial broadcasters must
figure out how to have a real one-to-one relationship with each and
every one of their viewers -- if they don't, they are destined to
become increasingly marginalised and dependent on occasional
national live events." TV, Murdoch was suggesting, should be more
like YouTube. Shine, the production company that Murdoch founded
and which News Corporation bought for £415 million, is investing in
the new YouTube ecosystem: it bought Gayner's ChannelFlip in
January 2012 and is helping with the startup's US expansion. And
YouTube's emphasis on watch-time already seems to be working: the
number of video views declined 28 percent from December 2011 to
March 2012, according to comScore. But during the same period,
users spent 61 billion minutes viewing videos -- a year-on-year
increase of 57 per cent. Nielsen has reported that the
average time spent per person watching TV has declined over
the last four years, and during the same period, hours spent
watching online TV has grown.

Tom Ridgewell

304 million channel views

Finlay Mackay

Ask anyone at YouTube if the company is aiming to
kill traditional TV and they will make polite noises about
YouTube being complementary. "YouTube is filling another space and
time in people's days," says Glotzbach. Others outside Google
agree. "YouTube invested $100 million (£63 million) in its channels
-- that would make about 40 hours of original programming," says
Lord Grade, who has served as chairman of the BBC, Channel 4 and
ITV in his time. "How many hours a year do you think the BBC, NBC
or CBS produces? $100 million is a drop in the bucket. I love
watching YouTube, but will it replace TV? No. The demand for
television content is not going to go away -- people will just
consume it in a more uninhibited way, wherever, whenever they
want."

"It's not the death of television," says Claire Enders, the
founder of Enders Analysis. "We know that for sure until 2020."

Seven years isn't long. "The notion of traditional TV is
finished," says Michael Rosenblum, an online television producer
and the founder of Rosenblum TV. "YouTube and internet video are
not only going to encroach on traditional broadcasting companies;
to my mind, they're going to destroy them. YouTube is just
getting started. It's actually disappointing to me that
they're going to channels, which is such an archaic, 1985-esque
mentality of how to transmit video content into people's
homes."

All this revolution will take is "one good product", according
to Locke, one that sparks the mass adoption of smart TVs in the
living room -- TV's lawn. "The big shift will be whether those
online behaviours shift from laptops and tablets into the living
room," he says. "As soon as we alter our behaviour in the living
room to be about things such as organic search or social
recommendations -- when you switch on your TV and see your
subscriptions to channels, or a search box, or what friends are
watching, the three ways that most people now use YouTube --
that's going to radically shift the position of traditional
broadcasters."

YouTube is getting ready for that moment. In October, it
quietly updated Leanback, an app that simplifies the site and makes
it much more palatable for sofa viewing. The battle for viewers'
attention is a zero-sum game: there are only so many minutes in a
day. But TV versus YouTube may prove to be only an
incidental skirmish in a much more important war for the
living room, as technology companies compete for your time.
If, as expected, Apple launches some form of smart TV, and
Amazon continues to focus on content-delivery devices such as the
Kindle set, the struggle for audience attention will be
fierce.

Those creating content aren't waiting to see whether
broadcasters survive. "An industry professional gave a talk to our
sixth form," Ridgewell says after receiving his award. "He said,
'I've been working in this industry for 40 years and I've just
finished my first film.' I was like, 'Fuck that. I have to
self-publish, I have to do this myself. I can't start as a runner
and work my way up, I have to get it out there', and that's what
YouTube allows. YouTube is where I want to be right now. It's
evolving into this TV-esque thing, but you can't really compare it
to TV because it's so new."

Ridgewell has turned down offers from traditional TV
broadcasters such as Hat Trick
Productions and BBC Comedy. "I'm having more fun here and not
only do I have more creative freedom, I can earn more
money." Day has a similar view: "I don't want to be in TV because I
don't want to give up my control for no upside. That sounds harsh,
but Charlie [McDonnell] gets more views than an episode of
EastEnders, which is kind of weird."

"The revolution won't be televised, it will be digitised," says
Edwards. "Yeah, cool, I can do it on TV, but if I've done it online
already, why do I need to do it on TV? I get the same amount of
views, and I'm my own boss."

How to: create your own successful YouTube
channel

1. Be authentic: "You shouldn't get into it unless you like
making things, videos or music," says Alex Day. "If you do it to
try and buy a house, then the internet detects that."

2. Be patient: "It takes at least two years to build an
audience," says Justin Gayner, cofounder of Channel-Flip. You won't
get rich quick: prepare
for the long haul.

3. Collaborate: "A different person can bring in energy -- a
fresh take or a different sense of humour," Day says. "And you can
share audiences." And let's face it -- it's more fun.

4. Interact: "One of the most important things is talking to my
subscribers," Tanya Burr says. "They feel like friends to me,
because I chat to them every day."

5. Maintain the quality: One bad video a week is fine; two is
"pushing it," says Tom Ridgewell. "Three bad videos and your
audience is done." So keep tabs on viewer feedback.

6. See the bigger picture: Don't think of your channel in terms
of content, says Ben McOwen Wilson: "Who's the audience? Why do
they care about this, and how will it evolve?"